|
Strategy 1 |
||
|
Prob- ability |
Sales |
Profits |
|
0.32 |
$ 250,000 |
$ 125,000 |
|
0.36 |
$ 1,000,000 |
$ 500,000 |
|
0.32 |
$ 1,750,000 |
$ 875,000 |
|
Strategy 2 |
||
|
0.125 |
$ 250,000 |
$ 125,000 |
|
0.75 |
$ 750,000 |
$ 375,000 |
|
0.125 |
$ 1,250,000 |
$ 625,000 |
Frederica Smith just completed an agreement to re-release a recording of "The Boss's Greatest Hits." (The "Boss" had a number of soul hits on the "top 40" during the 1960's.) Market research indicates 2 possible marketing strategies: (1) concentration on developing general consumer acceptance by advertising on late night TV, or (2) concentration on developing distributor acceptance thru intensive sales calls by firm reps.
B. Calculate the standard deviation and the coefficient of variation for each plan.
C. Which plan is riskier?